This market is getting wound up ... so pay attention (New Gold Video)

I think that the gold market is getting wound up. If I'm right, we're going to see an explosion in gold to the upside.

Here's the reasoning behind my optimism for this market: Right now we're seeing gold in an accumulation phase. A move over the $875 level in the spot market will signal the first step to propelling gold in an accelerated upward trajectory.

Certainly a move over the $890 level, basis spot, will begin to bring in many new buyers. When this happens, I expect gold to go into a crisis mode as more and more people look to preserve their capital and seek haven in this yellow metal.

Watch video here:

I would not be surprised to see more backing and filling as the bull market regenerates itself for an upward move. What may create this is a further deterioration in the world equity and banking markets, and the potential of nationalizing the banks both in Europe and in the States.

While this seems extreme, we are living in difficult times. It even appears to be getting even more complicated and fragile. I do not see any fast turnaround, via the new Obama administration, and I think they have been given an impossible task.

There is no guarantee that spending ourselves out of this recession is going to work. It even sounds like a silly plan when you say it out loud, "Let's spend our way out of a crisis that started from spending what we don't have." We will be printing more money and devaluing the dollar and its purchasing power. This can only be reflected in higher gold prices as investors try to maintain their purchasing power.

I have given you the key levels to look for. If these levels are broken on the upside, I would ask that you seriously think about taking long positions in this market. Currently, the April electronic contract is the one that has the most liquidity and that's the one to look at if you're not trading in the spot gold market.

Every success in the markets and in life,

Adam Hewison
Co-creator, MarketClub